Building and Growing Startups with Andrew Dumont

There’s obviously some sexiness with raising venture capital but truly the real Holy Grail for SaaS founders is to get a product in market to prove the concept,...

Share this post

There’s obviously some sexiness with raising venture capital but truly the real Holy Grail for SaaS founders is to get a product in market to prove the concept, to prove that it can produce revenue and get to the point where you don’t necessarily need venture capital funding but venture basically accelerates your growth. That’s the real point of power that you want to be in as a SaaS entrepreneur.

Andrew Dumont, VP Marketing at Bitly, has amassed an impressive background and list of achievements in start-ups and SaaS since he was18. These include building and growing companies like Tatango, SeeSmic (acquired by Hootsuite), Moz, Strideapp CRM( a side hustle of Andrews acquired by Neil Patel). More recently Andrew has been Entrepreneur in Residence at Betaworks, a start-up studio that’s been known for investing in Tumblr and AirBnB.

Last year, Andrew was also named as one of Forbes 30 innovators under the age of 30 and also the United Nations appointed him as an entrepreneurial delegate. If that wasn’t enough, Andrew advises at Techstars and Startup Weekends and an occasional columnist at Inc. Magazine.

He’s also got a blog at andrewdumont.me and of course, recently joined Bitly as VP of Marketing. Andrew Joined SaaScribe on The SaaS Revolution Show podcast to discuss his love for building and growing SaaS companies. You can listen to the podcast here and our SaaSStar interview is an excerpt for those preferring to use their eyes to ears.

Hi Andrew, You’ve done a ton of stuff since you were 18. Have you had time to do anything but work?

No. To be honest with you I really enjoy work and I really enjoy building start-up companies as you can tell. So that’s my fun as I’m sure you can relate. My side hustles were also my work and I just love doing it.

Then any free moment that I have that’s kind of where I put my time and my energy. So it’s kind of my fun, it’s my hobbies. As lame as that is that’s kind of the way I work.

Why start-ups rather than working for larger companies? What is it about start-ups that you love?

I ask myself that a lot actually because they’re much harder and the pay is often less, the hours are often longer. And people don’t really understand them as well. Like when you look at them from an outside perspective they don’t necessarily look as sexy as working for Facebook or Google or whatever it may be.

But for me, I just really love the idea, I’m pretty infatuated with the idea of taking something that didn’t exist or exists in a very limited capacity and bringing it to something much larger and more impactful and a real company. I just love that building process. Once you kind of do it once and you see the process and you fall in love with it, it’s really, really hard to leave.

What makes me up in the morning is learning things firsthand and failing. Having the freedom to fail is something that kind of really makes me happy and that’s how I learn. Start-ups are really the only place where you can do that and you can do that quickly.

I really have fallen in love with the pace of learning, the concept of creating something from nothing. Just the community as well, I love being around builders, creators, people that are doing stuff every single day. I haven’t left since.

One of the startups you’ve been involved in was Strideapp, a SaaS CRM which was a side hustle whilst you’re working at Moz?

Yeah. That’s right.

What did you learn fromworking on that as a side hustle whilst you had a full time job and why did you sell the company when you did?

Well, so I really wanted to build something firsthand and it was a good opportunity to do that. I actually built it for my own need, which I think is always a good place to start for building a start-up and especially a software company.

I learned how challenging it can be doing a side hustle. It’s very, very hard especially with a small team as well, which is what I had working with me at Stride. It’s very hard keeping people motivated, keeping yourself motivated and continuing to push. You know, when you’re already working one full time job it’s never easy getting something off the ground.

But to be honest with you, the work that I did with that was actually some of the work that I’m most proud of just because it is so difficult to execute well in a start-up in general, but as a side hustle it’s very, very hard to do.

So yeah, I really learned a lot about team motivation. I really learned a lot about how to get something off the ground, how to scale with limited time, limited resources. It was all bootstrapped so I learned a lot about being very efficient with the capital I did have.

The reason why we ended up selling it was some of us wanted to go full time on it, others of the team didn’t. We just want all-in as a team and it wasn’t something that or at least an idea that we were really passionate about enough to really commit another couple of years of our life to it full time or however long to create. So that’s why we ended up deciding to sell it.

But it was an amazing process and we built a profitable business that was generating a decent amount of revenue every month and had a lot of customers and folks that really enjoyed the products. For us we found a good opportunity to put it in the hands of somebody who’s going to take good care of it and continue to evolve the product. So that was the process behind that.

How did you come about selling it to Neil Patel

So Neil and I have known each other for a while. As you know, he’s one of the prolific SaaS entrepreneurs out there. It just kind of lined up.

What ended up happening is they ended up acquiring it, Neil and Heaton, and they spent some time on it and then they parlayed that into another purchase by ProsperWorks who now is owning and managing it and running it.

So it just kind of came up through a friendship and an opportunity. I think it worked out well for the situation.

You’ve previously written about some of the challenges with the freemium models. Can you elaborate on the challenges that you had with freemium and your thoughts on freemium as a SaaS pricing model?

Yeah. I think freemium is great. And if you can do it… The problem for us was that we were bootstrapped like I said. So revenue was important for us to continue to operate and devote the time we needed to to continue to evolve and get the right people on and all that.

So for us freemium didn’t really work as well just because when you do freemium you obviously get a much larger user base and there’s definitely a lot of value in a user base and you can move people through the funnel to pay it often times.

But generally for me, sure conversion rates standpoint and revenue standpoint typically freemium doesn’t perform as well, or at least in my experience it doesn’t perform as well as a pure paid product.

What we did when we started Stride is we started as freemium and then we then moved into a pure subscription-based product with a 30-day trial. It performed better for me, a sure revenue standpoint.

But keep in mind that was under the context of a bootstrap product and a side hustle. But if I was to do it full time, I do definitely believe in freemium and we likely would have doubled down on the freemium model. It just wasn’t generating the revenue we needed for the type of situation that we were in.

What advice would you give to SaaS founders that perhaps are in a similar position to where you were when you were working on Strideapp as a Co-founder in terms of the side hustling aspect? What advice would you give to a SaaS founder in the same shoes?

So I think it’s a beautiful way to do it. I think that the amazing nature of SaaS businesses is that you can generate revenue from Day 1, and often times you can generate revenue without a very heavy or very large cost on like a monthly basis to do that. The other thing, too, with SaaS is that it often takes a lot of time to ramp up a SaaS business from no revenue, no product to meaningful revenue.

There’s obviously some sexiness with raising venture capital but truly the real Holy Grail for SaaS founders is to get a product in market to prove the concept, to prove that it can produce revenue and get to the point where you don’t necessarily need venture capital funding but venture basically accelerates your growth. That’s the real point of power that you want to be in as a SaaS entrepreneur.

Doing something as a side project allows you to get to that point without the true burden of burning cash and the time that it takes, burning the time that it takes to get a product in market and to that point. So I’m all for it and I would do it again 100%. You just have to have some clear timelines in place and some clear numbers that you’re looking at.

Like for me, it would have been X amount of revenue generated per month from this product that would have been my trigger to say, “Okay, we’re ready. Let’s go full time on it.” But I just didn’t have the right team in place to do that.

So I guess my advice is definitely do it but set very strict guidelines around your timeline for it.

So now you’re at Bitly. I know and use Bitly for URL shortening. Beyond that, what other products does Bitly offer and how is it helping SaaS companies?

Yeah. So this was actually a really fascinating opportunity. I came to Betaworks which was the start-up studio that you mentioned. Betaworks was actually the studio where Bitly was created back in 2008. So basically what happened was I did this Entrepreneur in Residence program and the partners at Betaworks basically wanted me to move into a role, an executive role at Bitly.

Bitly is in a really unique spot. So they are actually a SaaS business and a lot of people just don’t know that. They have obviously the free product that millions of people use every single month. But they also have a pro version of that that is an enterprise level SaaS product that 750 large enterprise businesses are using every single month.

It’s actually a really, really fun challenge and a lot of my experience is in self-service SaaS where you put in your credit card, sign up, and the funnel much cleaner. At Bitly, the funnel is actually quite a bit more complex and enterprise SaaS is actually very different than self-service. I really, really wanted to understand enterprise SaaS and the marketing challenge that Bitly presents I think is really exciting.

So that’s kind of how this relates to SaaS. It’s a really fun challenge and a really different kind of challenge.

This is not an interview for Bitly. You already got the job, but what do you plan to bring to the table for them as VP of Marketing?

I’m very much a performance type marketer and I’m a SaaS entrepreneur at heart. So everything that I’m going to do is going to be performance based and really bring some rigour to their funnel.

So it’s a lot of just kind of nuts and bolts work on getting the funnel in place and, yeah, really like turning it into a real enterprise offer business. It’s a relatively large business right now. It’s a $10 million a year SaaS business right now from their enterprise product, but it can be much larger.

So it’s a lot of just nuts and bolts. It’s making it clear that Bitly does actually have a paid software product. That’s just things like putting pricing on the site, building a credit card sign-up form to actually start using the enterprise product and just doing a lot of the things that we all know how to do but it’s just kind of putting those things in place.

So yeah, it will be fun. I think it’s always challenging when you have a free product that lived for a long time as a free URL shortener, but now it actually needs to turn into a business and that’s the process that we’re in right now.

A well-known blog post of yours on the Moz Blog is ‘21 Tactics to Acquire Customers’. Can you give us three tactics for SaaS Founders to acquire customers from that list?

Oh, gosh. It’s been a while since I wrote that. I think that was back in my Moz days. But I would recommend people obviously to go give it a read and see if anything jumps out.

But generally I think for a lot of SaaS founders it’s not really the tactics. It’s just kind of having a plan and it’s having a testing process in place because what you’ll find is that some tactics work really, really well for some companies and others don’t. It’s really just kind of finding the things that work and then really doubling down and investing on those things.

So I really don’t remember all of them but I do recommend definitely going back and taking a look at that post and reaching out to me if you have any questions as you work through it. I’m just hello@andrewdumont.me. I found those are really just hands on stuff that I learned from Moz or Stride, just actual tactics that I’ve used in the past that I’ve proven to perform really well.

Growth Hacking is possibly the SaaS job role de jour right now. Could you elaborate on why you have mixed feelings around growth hacking?

Yeah, it’s not mixed feelings on growth hacking. I think generally the role of a growth hacker is definitely needed. I think it’s more on just the term.

I think the problem with marketing in general is that it’s really hard to vet out the people that know what they’re doing versus the ones that don’t. I think the problem with growth hacking is that a lot of people just kind of latched onto it without actually understanding what it means and how to actually do it and why it’s important. I think it kind of spiralled a little bit.

But no, I mean, generally I think it’s very important. I think the real thing that can be taken away from the growth hacking mindset is using data and being technical and querying all the data that you can to informed decisions and make data-driven marketing decisions which is something that a lot of us, especially in the SaaS world, that there’s just so much data out there and everything that you can track. Just being intelligent about the things that you’re doing and the decisions that you’re making.

I think really like that’s the end take-away from the term “growth hacker” that I think we all need to kind of adopt. But I think anybody in the SaaS world that is doing marketing or even at a small company as a founder like it’s all growth hacking, it’s all using data to inform what you’re doing and where you’re investing. I’m all for that.

You’ve also written that one of the things that you’re most proud about is the failures that you’ve had. Why is that?

Well, I believe in learning and I believe in learning through experience. So the way that I look at failure is it’s just a learning process. The whole goal of your career and I think life in general is to learn as much as possible and become as self-aware and knowledgeable as you can. Failure is a way of getting there. That’s the means to get to that end. So that’s kind of how I see it as a valuable thing.

I think generally, too, the reason why people are kind of latching on to the failure term is that with entrepreneurship and start-ups there’s a lot of pressure on it both financially and emotionally. I think being supportive of that process and realising that not everything is going to be an Uber or a Google or Facebook.

And there are wins at a lower level beneath that. I think just supporting that process and supporting the process of building is really what’s important. Whether you succeed or fail at the end, great if you succeed and great if you fail. You can move to the next thing.

So generally I’m very supportive of that process and I know that it’s been very, very valuable to me in my own growth. So that’s kind of how I think about failure.

Andrew Dumont was interviewed by Alex Theuma. You can listen to the full interview on the podcast available on itunes Here

In this article